The residential real estate market in Gujarat’s top city Ahmedabad has been riding high on affordable housing projects over the last five years. A highly price-sensitive market, Ahmedabad is banking heavily on boosted demand for affordable homes. The government’s push for the affordable segment is another feather that gives it the much-needed impetus. No wonder more than half of the units launched from 2014 onwards catered to the budgeted segment priced <INR 40 lakh.
Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants says, “According to ANAROCK research, as many as 1,30,650 units across different budget segments have been launched in the city since 2014 till H1 2019. Of this, nearly 52% (approx. 67,400 units) were in the affordable segment, followed by 37,400 units in the mid-segment (INR 40 lakh to INR 80 lakh). Luxury and ultra-luxury units in this major Tier 2 city were limited at 14% and 11% respectively.”
Rapid industrialization, proposed infrastructure development, good connectivity, GIFT city (one of the 1st Smart Cities in the country), expressways, etc. are major factors spearheading realty growth in Ahmedabad over the last few years, particularly affordable housing. Interestingly, Ahmedabad also emerged as one of the favorites for property investment among the Tier 2 & 3 cities, as revealed in ANAROCK’s Consumer Sentiment Survey for H1 2019.
The survey stated that Tier 2 & 3 cities were the first preference for nearly 26% of property seekers looking to invest in realty in 2019 and Ahmedabad was among the top. Low property prices along with improved infrastructure in the city in fact attracted over 11% NRI investors.
“Our data also reveals that the city saw overall absorption of nearly 1.15 lakh units between 2014 till H1 2019,” says Santhosh Kumar. “Before demonetization, housing sales in 2015 increased by 24% to cross 25,400 units mark from the previous year’s 20,480 units. However, there was a drastic drop in housing sales during the DeMo quarter and henceforth unit sales each year have been hovering around 20,000 marks. In H1 2019, absorption has remained tepid at about 9,070 units – falling by 16% since H1 2018.”
Unsold Housing Inventory
H1 2019 saw unsold housing stock in Ahmedabad see a yearly decline of 11% against H1 2018. In H1 2019, unsold housing inventory in the city was 48,500 units. Earlier, the unsold inventory in the city had been piling up since 2014 onwards – from 36,100 units in 2014 to nearly 53,440 units by the end of 2018. The first half of 2019 saw green shoots of revival, largely because developers restricted new supply in the market and instead concentrated on sale and completion of previously launched units.
Currently, of the total 48,500 unsold units as on H1 2019, over 44% is in the affordable segment, followed by 29% in the mid-segment. Merely 6,800 units unsold units are in the luxury segment, and approx. 6,090 units in the ultra-luxury segment.
The average price of residential properties in Ahmedabad is around INR 2,870 per sq. ft. as on H1 2019. Trends suggest that prices have remained more or less stagnant over the last two years, primarily because housing sales have not seen a major increase and builders are wary of hiking the prices in the back of relatively lower demand in comparison to earlier peak levels of 2014. If we compare to Q2 2015, average property prices in the city have seen merely a 5% rise in Q2 2019.
Among the top realty markets where both demand and supply peaked during the last five years included Nava Naroda, Chandkheda, SG Highway, Nikol, Bopal, Vatva, Gota, Vastral, Narolgam, and New Maninagar.
Ahmedabad’s Most Expensive Housing Markets
The top five luxury markets in Ahmedabad in the primary market are Bodakdev, Ambli, Satellite, Prahlad Nagar and Ambavadi.
- Bodakdev is an upmarket locality that attracts affluent homebuyers largely due to its superior and serene surroundings. It has a robust transportation network with well-planned interior roads and lanes that are easily accessible to other key localities. The avg. price for luxury homes is around INR 7,000 per sq. ft.
- Located close to Bodakdev, Ambli is second-most high-end locality that offers numerous options for the rich commanding avg. prices of INR 6,800 per sq. ft.
- Third, in the list of luxury localities is Satellite which is dotted with high-end luxury villas and large apartments. The average prevailing prices of luxury homes here is INR 6,500 per sq. ft.
- The fourth and the fifth localities are Prahlad Nagar and Ambavadi in that order with avg. prices of INR 6,200 and INR 6,000 per sq. ft. respectively.